Annual general meetings of listed companies are usually anodyne affairs. Older shareholders either sing the companies’ praises or quibble about the dividends on offer.
But when it’s India’s most valuable company, headed by the world’s sixth-richest person, there is a lot of interest from investors and the media. And not without reason.
At Reliance Industries Limited’s (RIL) 2019 AGM, chairman and managing director Mukesh Ambani announced announced Moneycontrol RIL AGM 2019: Top announcements made by Reliance Industries CMD Mukesh Ambani Read more a stake sale in its oil-to-chemicals business to Saudi Aramco, and the launch date for its fibre-to-the-home broadband service.
This year’s AGM, to be held virtually today, comes on the heels of investments worth over Rs 1,18,000 crore Rs 1,18,000 crore Mint Qualcomm Ventures to invest ₹730 cr in Jio Platforms for 0.15% stake Read more ($16 billion) in its digital services subsidiary Jio Platforms, and the rollout rollout The Economic Times JioMart website goes live across 200 cities in India Read more of its online grocery service, JioMart, in 200 cities. In this context, some announcements about RIL’s retail business are expected.
RIL is also reportedly reportedly The Times of India RIL nears deal to acquire retail biz of Future Group Read more in talks to acquire debt-laden Future Group’s retail businesses, including its flagship company, Future Retail, which runs the Big Bazaar chain of supermarkets. This will consolidate the market-leader position of Reliance Retail, India’s largest retail chain by revenue and network, in the largest of retail segments: food and grocery (F&G).
Should the deal go through, Reliance Retail would account for more than half of the organised F&G market. It will have twice the market share of India’s most valuable listed retailer, Avenue Supermarts, which operates the DMart chain of supermarkets.
At 4%, the penetration of organised players in F&G is the lowest among all retail categories. This, even as F&G made up two-thirds of the Rs 51,00,000 crore ($675 billion) retail market in India in 2018, according to Technopak, a retail consultancy, and HDFC Securities. “If you want to look at absolute scale, there is no better retail segment,” says Devangshu Dutta, chief executive of retail consultancy Third Eyesight.
However, F&G is a notoriously difficult business, with gross margins as low as 12%, according to a December 2019 report report HDFC Securities Who’s moving the retail flywheel?